Business Wire | Jan 27, 2022 06:00PM EST

CW Bancorp Reports 2021 Full Year Record Earnings of $14.2 million, EPS of $3.95 and ROTE of 20.27%

Jan. 27, 2022

IRVINE, Calif.--(BUSINESS WIRE)--Jan. 27, 2022--CW Bancorp (OTCQX: CWBK), the parent company ("the Company") of CommerceWest Bank (the "Bank") reported consolidated net income for the fourth quarter of 2021 of $3,974,000 or $1.11 a share as compared to $4,976,000 or $1.37 a share for the fourth quarter of 2020, an EPS decrease of 19%. Net income for the twelve months ended December 31, 2021 was $14,179,000 or $3.95 a share as compared to $9,091,000 or $2.48 a share for the twelve months ended December 31, 2020, an EPS increase of 59%.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220127005330/en/

Bank Headquarters in Irvine, California (Photo: Business Wire)

Key Financial Results for the three months ended December 31, 2021:

* ROA of 1.18% * ROTE of 22.42% * Total loans excluding PPP loans up 47% * Noninterest bearing deposit growth up 10% * Loan to deposit ratio of 62%, up 31% * Cost of deposits of 0.06% down 60% * Efficiency ratio of 42.58% * 48 quarters of consecutive profits

Key Financial Results for the twelve months ended December 31, 2021:

* Net income growth of 56% * EPS of $3.95 up 59% * ROA of 1.15% up 4.37% * ROTE of 20.27% up 39.92% * Average total asset growth up 50% * Noninterest-bearing deposits as percent of total deposits at 57% * Average total deposit growth up 50% * Fees on deposit accounts up 23% * Zero nonperforming loans

Mr. Ivo Tjan, Chairman and CEO said, "CommerceWest reported solid results with record net income, record EPS and record total assets. Our Company continues to perform extremely well despite the headwinds related to COVID, inflation and supply chain bottlenecks. Credit quality remains pristine with zero problem loans. We are optimistic about the strength of our business model to acquire new client relationships and create long term shareholder value. I remain especially proud of our team members who continue to persevere everyday through all of the challenges that the global pandemic has brought to all of us."

Total assets increased $45.5 million as of December 31, 2021, an increase of 3% as compared to the same period one year ago. Total loans increased $176 million as of December 31, 2021, an increase of 30% over the prior year. Total loans net of PPP loans increased $228 million as of December 31, 2021, an increase of 47%. Cash and due from banks decreased $242 million or 38% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $101 million, an increase of 132% from the prior year.

Total deposits decreased $13 million as of December 31, 2021, a decrease of 1% from December 31, 2020. Non-interest-bearing deposits increased $62 million as of December 31, 2021, an increase of 10% over the prior year. Interest bearing deposits decreased $75 million as of December 31, 2021, a decrease of 12% over the prior period.

Interest income was $8,113,000 for the three months ended December 31, 2021 as compared to $8,434,000 for the three months ended December 31, 2020, a decrease of 4%. Interest income was $30,209,000 for the twelve months ended December 31, 2021 as compared to $27,908,000 for the twelve months ended December 31, 2020, an increase of 8%. Interest expense was $545,000 for the three months ended December 31, 2021 as compared to $336,000 for the three months ended December 31, 2020, an increase of 62% due to the Company adding $50 million in subordinated debt during 2021. Interest expense was $2,024,000 for the twelve months ended December 31, 2021 as compared to 1,928,000 for the twelve months ended December 31, 2020, an increase of 5%.

Net interest income for the three months ended December 31, 2021 was $7,568,000 as compared to $8,098,000 for the three months ended December 31, 2020, a decrease of 7%. The net interest margin decreased for the three months ended December 31, 2021. It decreased from 3.49% in 2020 to 2.37% in 2021, a decrease of 32.09%, due to PPP loans which are earning 1.00% interest. Net interest income for the twelve months ended December 31, 2021 was $28,185,000 as compared to $25,980,000 for the twelve months ended December 31, 2020, an increase of 8%. The net interest margin decreased for the twelve months ended December 31, 2021. It decreased from 3.34% in 2020 to 2.42% in 2021, a decrease of 27.54% that was largely due to the high levels of excess liquidity held during the year as well as the 1.00% interest rates on PPP loans.

Provision for loan losses for the three months ended December 31, 2021 was $525,000 compared to $750,000 for the three months ended December 31, 2020, a decrease of 30%. Provision for loan losses for the twelve months ended December 31, 2021 was $525,000 compared to $6,593,000 for the twelve months ended December 31, 2020, a decrease of 92%. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.93% as of December 31, 2020 to 1.36% as of December 31, 2021.

Non-interest income for the three months ended December 31, 2021 was $2,275,000 compared to $4,049,000 for the same period last year, a decrease of 44%. During the prior year the Bank recognized a gain on sale of Main Street Lending Program loans of $2.9 million in the fourth quarter. Non-interest income for the twelve months ended December 31, 2021 was $6,155,000 compared to $7,268,000 for the same period last year, a decrease of 15%.

Non-interest expense for the three months ended December 31, 2021 was $4,232,000 compared to $4,416,000 for the same period last year, a decrease of 4%. Non-interest expense for the twelve months ended December 31, 2021 was $15,220.000 compared to $14,408,000 for the same period last year, an increase of 6%.

The efficiency ratio for the three months ended December 31, 2021 was 42.58% compared to 47.74% in 2020, which represents a decrease of 10.81%. The efficiency ratio illustrates that for every dollar made for the three-month period ending December 31, 2021, it cost $0.4258 to make it, as compared to $0.4774 one year ago. The Bank's efficiency ratio for the twelve months ended December 31, 2021 was 43.93% compared to 47.16% in 2020, which represents a decrease of 6.86%.

Capital ratios for the Bank remain above the levels required for a "well capitalized" institution as designated by regulatory agencies. As of December 31, 2021, the tier 1 leverage ratio was 8.38%, the common equity tier 1 capital ratio was 15.17%, the tier 1 risk-based capital ratio was 15.17% and the total risk-based capital ratio was 16.42%.

CommerceWest Bank is determined to redefine banking for small and medium sized businesses by delivering on customized products and services. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state of California with our digital banking platform. By employing a strategically selected team of experienced professionals, we will provide flexibility, create a complete, safe and sound banking experience for each client. We provide a wide range of commercial banking services, including remote deposit solution, NetBanker online banking, mobile banking, lines of credit, M&A / working capital loans, commercial real estate loans, SBA loans and treasury management services.

Mission Statement: CommerceWest Bankwill create a complete banking experience for each client, catering to businesses and their specific banking needs, while accommodating our clients and providing them high-quality, low stress and personally tailored banking and financial services.

Please visit www.cwbk.com to learn more about the bank. "BANK ON THE DIFFERENCE"

Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, balance sheet management, expanded net interest margin, the ability to control costs and expenses, interest rate changes, financial policies of the United States government and general economic conditions. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained in this release to reflect future events or developments.

FOURTH QUARTER REPORT - DECEMBER 31,2021 (Unaudited) CW BANCORP %CONSOLIDATED BALANCE SHEET Increase(dollars in thousands) December 31, December 31, (Decrease) 2021 2020 ASSETSCash and due from banks $ 398,121 $ 640,103 -38%

Securities available for sale 150,523 76,913 96%

Securities held-to-maturity 27,688 500 5438%

Loans (PPP loans $53,818 and $106,285 767,450 591,433 30%at 2021 and 2020, respectively)Less allowance for loan losses (9,710 ) (9,358 ) 4%

Loans, net 757,740 582,075 30%

Bank premises and equipment, net 5,883 584 907%

Other assets 25,970 20,287 28%

Total assets $ 1,365,925 $ 1,320,462 3%

LIABILITIES AND STOCKHOLDERS' EQUITYNon-interest bearing deposits $ 699,968 $ 637,947 10%

Interest bearing deposits 529,082 604,534 -12%

Total deposits 1,229,050 1,242,481 -1%

Subordinated debenture 50,000 - 100%

Other liabilities 13,340 7,773 72%

1,292,390 1,250,254 3%

Stockholders' equity 73,535 70,208 5%

Total liabilities and stockholders' $ 1,365,925 $ 1,320,462 3%equity Shares outstanding at end of period 3,437,891 3,531,996

Book value per share $ 20.76 $ 18.91

Total loans to total deposits 62.44 % 47.60 %

ALLL to total loans (net of PPP 1.36 % 1.93 %loans)Nonperforming assets (non-accrual $ - $ - loans & OREO) COMMERCEWEST BANK CAPITAL RATIOS:Tier 1 leverage ratio 8.38 % 6.49 %

Common equity tier 1 capital ratio 15.17 % 11.35 %

Tier 1 risk-based capital ratio 15.17 % 11.35 %

Total risk-based capital ratio 16.42 % 12.61 %

CW BANCORPCONSOLIDATED STATEMENT OF INCOME (Unaudited)Three Months EndedIncreaseTwelve Months EndedIncrease(dollars in thousands except share and per share data)Dec 31, 2021Dec 31, 2020(Decrease)Dec 31, 2021Dec 31, 2020(Decrease)INTEREST INCOMELoans$

6,865

$

7,665

-10%

$

26,496

$

25,119

5%

Investments917

459

100%

2,490

1,841

35%

Fed funds sold and other331

310

7%

1,223

948

29%

Total interest income8,113

8,434

-4%

30,209

27,908

8%

INTEREST EXPENSEDeposits187

336

-44%

993

1,924

-48%

Subordinated debenture358

-

100%

1,031

-

100%

Other borrowings-

-

-

-

4

-100%

Total interest expense545

336

62%

2,024

1,928

5%

NET INTEREST INCOME BEFORE LOAN LOSS PROVISION7,568

8,098

-7%

28,185

25,980

8%

PROVISION FOR LOAN LOSSES525

750

-30%

525

6,593

-92%

NET INTEREST INCOME AFTER LOAN LOSS PROVISION7,043

7,348

-4%

27,660

19,387

43%

NON-INTEREST INCOME-

Service Charges and Fees on Deposits1,171

1,009

16%

4,447

3,619

23%

Gain on Sale of Loans-

2,968

-100%

(4

)

2,968

-100%

Other Fees1,104

72

1433%

1,712

681

151%

NON-INTEREST EXPENSE4,232

4,416

-4%

15,220

14,408

6%

EARNINGS BEFORE INCOME TAXES5,086

6,981

-27%

18,595

12,247

52%

INCOME TAXES1,112

2,005

-45%

4,416

3,156

40%

NET INCOME$

3,974

$

4,976

-20%

$

14,179

$

9,091

56%

Basic earnings per share$

1.14

$

1.41

-19%

$

4.03

$

2.55

58%

Diluted earnings per share$

1.11

$

1.37

-19%

$

3.95

$

2.48

59%

Return on Assets1.18

%

2.02

%

-41.71%

1.15

%

1.10

%

4.37%

Return on Equity21.48

%

29.37

%

-26.85%

19.42

%

13.82

%

40.55%

Return on Tangible Equity22.42

%

30.04

%

-25.37%

20.27

%

14.49

%

39.92%

Efficiency Ratio42.58

%

47.74

%

-10.81%

43.93

%

47.16

%

-6.86%

Cost of Deposits0.06

%

0.15

%

-60.00%

0.09

%

0.26

%

-65.97%

Net Interest Margin2.37

%

3.49

%

-32.09%

2.42

%

3.34

%

-27.54%

CW BANCORPCONSOLIDATEDSTATEMENT OF Three Months Ended Increase Twelve Months Ended IncreaseINCOME(Unaudited)(dollars inthousands Dec 31, Dec 31, Dec 31, Dec 31,except share 2021 2020 (Decrease) 2021 2020 (Decrease)and pershare data) INTERESTINCOMELoans $ 6,865 $ 7,665 -10% $ 26,496 $ 25,119 5%

Investments 917 459 100% 2,490 1,841 35%

Fed funds 331 310 7% 1,223 948 29%sold andotherTotal 8,113 8,434 -4% 30,209 27,908 8%interestincome INTERESTEXPENSEDeposits 187 336 -44% 993 1,924 -48%

Subordinated 358 - 100% 1,031 - 100%debentureOther - - - - 4 -100%borrowingsTotal 545 336 62% 2,024 1,928 5%interestexpense NET INTERESTINCOME 7,568 8,098 -7% 28,185 25,980 8%BEFORE LOANLOSSPROVISION PROVISION 525 750 -30% 525 6,593 -92%FOR LOANLOSSES NET INTERESTINCOME AFTER 7,043 7,348 -4% 27,660 19,387 43%LOAN LOSSPROVISION NON-INTEREST -INCOMEServiceCharges and 1,171 1,009 16% 4,447 3,619 23%Fees onDepositsGain on Sale - 2,968 -100% (4 ) 2,968 -100%of LoansOther Fees 1,104 72 1433% 1,712 681 151%

NON-INTEREST 4,232 4,416 -4% 15,220 14,408 6%EXPENSE EARNINGS 5,086 6,981 -27% 18,595 12,247 52%BEFOREINCOME TAXES INCOME TAXES 1,112 2,005 -45% 4,416 3,156 40%

NET INCOME $ 3,974 $ 4,976 -20% $ 14,179 $ 9,091 56%

Basic $ 1.14 $ 1.41 -19% $ 4.03 $ 2.55 58%earnings pershareDiluted $ 1.11 $ 1.37 -19% $ 3.95 $ 2.48 59%earnings pershareReturn on 1.18 % 2.02 % -41.71% 1.15 % 1.10 % 4.37%AssetsReturn on 21.48 % 29.37 % -26.85% 19.42 % 13.82 % 40.55%EquityReturn on 22.42 % 30.04 % -25.37% 20.27 % 14.49 % 39.92%TangibleEquityEfficiency 42.58 % 47.74 % -10.81% 43.93 % 47.16 % -6.86%RatioCost of 0.06 % 0.15 % -60.00% 0.09 % 0.26 % -65.97%DepositsNet Interest 2.37 % 3.49 % -32.09% 2.42 % 3.34 % -27.54%MarginCW BANCORPCONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSISThree Months Ended December 31,

2021

2020

AverageBalanceInterestIncome /ExpenseYield /CostAverageBalanceInterestIncome /ExpenseYield /Cost(dollars in thousands)INTEREST EARNING ASSETSInt Bearing Due from Banks & FFS$

448,609

$

263

0.23%

$

266,336

$

274

0.41%

Investment Securities (1)175,383

1,013

2.29%

74,951

527

2.80%

Loans653,534

6,865

4.17%

583,742

7,665

5.22%

FHLB & Other Stocks4,177

68

6.46%

2,996

36

4.78%

Total interest-earning assets1,281,703

8,209

2.54%

928,025

8,502

3.63%

Noninterest-earning assets57,401

54,174

Total assets$

1,339,104

$

982,199

INTEREST EARNING LIABILITIESInterest Bearing Deposits$

547,808

$

187

0.14%

424,807

336

0.31%

Subordinated Debenture38,145

358

3.75%

-

-

0.00%

Total interest-earning liabilities585,953

545

0.37%

424,807

336

0.31%

Noninterest-earning liabilitiesDemand Deposits666,004

481,919

Other Liabilities13,759

8,052

Shareholders' Equity73,388

67,421

Total liabilities and shareholder's equity$

1,339,104

$

982,199

Net Interest Spread$

7,664

2.17%

$

8,166

3.32%

Net Interest Margin2.37%

3.49%

Total Deposits$

1,213,812

$

187

0.06%

$

906,726

$

336

0.15%

Total Funding Costs$

1,251,957

$

545

0.17%

$

906,726

$

336

0.15%

(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rateCW BANCORP CONSOLIDATED AVERAGE BALANCE SHEET and YIELDANALYSIS Three Months Ended December 31,

2021 2020

Average Interest Yield Average Interest Yield Balance Income / / Balance Income / / Expense Cost Expense Cost (dollars in thousands)INTEREST EARNING ASSETSInt Bearing Due from $ 448,609 $ 263 0.23% $ 266,336 $ 274 0.41%Banks & FFSInvestment 175,383 1,013 2.29% 74,951 527 2.80%Securities (1)Loans 653,534 6,865 4.17% 583,742 7,665 5.22%

FHLB & Other Stocks 4,177 68 6.46% 2,996 36 4.78%

Total 1,281,703 8,209 2.54% 928,025 8,502 3.63%interest-earning assets Noninterest-earning 57,401 54,174assetsTotal assets $ 1,339,104 $ 982,199

INTEREST EARNING LIABILITIESInterest Bearing $ 547,808 $ 187 0.14% 424,807 336 0.31%DepositsSubordinated 38,145 358 3.75% - - 0.00%DebentureTotal 585,953 545 0.37% 424,807 336 0.31%interest-earning liabilities Noninterest-earning liabilitiesDemand Deposits 666,004 481,919

Other Liabilities 13,759 8,052

Shareholders' Equity 73,388 67,421

Total liabilities $ 1,339,104 $ 982,199and shareholder's equity Net Interest Spread $ 7,664 2.17% $ 8,166 3.32%

Net Interest Margin 2.37% 3.49%

Total Deposits $ 1,213,812 $ 187 0.06% $ 906,726 $ 336 0.15%

Total Funding Costs $ 1,251,957 $ 545 0.17% $ 906,726 $ 336 0.15%

(1) Amounts calculated on a fully taxable equivalent basis using the currentstatutory federal tax rateCW BANCORPCONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSISTwelve Months Ended December 31,2021

2020

AverageBalanceInterestIncome /ExpenseYield /CostAverageBalanceInterestIncome /ExpenseYield /Cost(dollars in thousands)INTEREST EARNING ASSETSInt Bearing Due from Banks & FFS$

411,665

$

1,027

0.25%

$

153,479

$

798

0.52%

Investment Securities (1)112,123

2,796

2.49%

70,967

2,123

2.99%

Loans651,329

26,496

4.07%

555,967

25,119

4.52%

FHLB & Other Stocks3,762

196

5.21%

2,992

150

5.01%

Total interest-earning assets1,178,879

30,515

2.59%

783,405

28,190

3.59%

Noninterest-earning assets56,104

40,420

Total assets$

1,234,983

$

823,825

INTEREST EARNING LIABILITIESInterest Bearing Deposits$

486,809

$

993

0.20%

396,460

1,924

0.49%

Other Borrowings$

11

$

-

0.00%

252

4

1.59%

Subordinated Debenture27,592

1,031

3.74%

-

-

0.00%

Total interest-earning liabilities514,412

2,024

0.39%

396,712

1,928

0.48%

Noninterest-earning liabilitiesDemand Deposits636,171

354,416

Other Liabilities11,407

6,900

Shareholders' Equity72,993

65,797

Total liabilities and shareholder's equity$

1,234,983

$

823,825

Net Interest Spread$

28,491

2.20%

$

26,262

3.11%

Net Interest Margin2.42%

3.34%

Total Deposits$

1,122,980

$

993

0.09%

$

750,876

$

1,924

0.26%

Total Funding Costs$

1,150,583

$

2,024

0.18%

$

751,128

$

1,928

0.26%

(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005330/en/

CONTACT: Bancorp Contact Mr. Ivo A. Tjan, CEO Ms. Leeann Cochran, CFO Telephone: (866) 521-CWBK E-mail: InvestorRelations@cwbk.com Website: www.cwbk.com "Bank on the Difference"